Colorado is scoring big with business, and it’s due to a triad of factors that lure in entrepreneurs — and that also fall trippingly from the tongue: technology, talent and tourism.

A recent report ranked the state No. 1 for the number of loans given to small businesses and for its concentration of technology businesses. The annual survey by the U.S. Chamber of Commerce also placed Colorado in the top 10 for its talent pool, business climate, infrastructure and economic performance.

In addition to technology and available talent, tourism in Colorado is a major economic driver, and one many businesses are capitalizing on. In Estes Park, for example, tourists spend about $187 million each year at local businesses. That revenue stream helped place Estes Park among NerdWallet’s top 10 places to start a business in Colorado.

NerdWallet’s analysis

We analyzed 85 places in Colorado, each with at least 500 businesses and a population of at least 5,000. We determined the overall score of each place by using data from the U.S. Census Bureau to assess a city’s business climate and economic health. See the end of this study for more details on our methodology.

Key takeaways

Making the most of the great outdoors. Skiing, hiking, rafting, fishing and other outdoor activities draw millions of tourists to Colorado’s mountain towns each year, and businesses in cities such as Vail, Aspen and Estes Park are thriving thanks to the spending power of these visitors.

Proximity to Denver is a plus. For our list, bigger isn’t always better. The largest city to crack the top 20 was Grand Junction, which has a population of almost 60,000. Denver, the most populous city we considered, came in at No. 29. But proximity to the state’s capital city can be a bonus for businesses: Two cities in the top 10, Greenwood Village and Lone Tree, are part of the Denver metropolitan area.

Best places to start a business in Colorado

1. Greenwood Village

Greenwood Village’s roughly 4,700 businesses have an average annual revenue per business of over $3.7 million, the highest of any city in this study. The business climate in the area gets a boost from the Denver Tech Center, a business campus of more than 900 acres that spans part of Greenwood Village. Red Robin, a national restaurant chain, is headquartered in the city.

2. Aspen

Artists, culinary enthusiasts and outdoor-adventure seekers flock to this Rocky Mountain town and so do the businesses that cater to them. With nearly 46.5 businesses per 100 residents, Aspen has the highest concentration of businesses among places included in this study. The majority of enterprises cater to tourists, who tend to be high earners. Nearly 60% of visitors to Aspen in summer 2014 had an annual household income of $100,000 or higher, and 35.6% of that group earned over $200,000 annually, according to the Aspen Chamber of Commerce.

3. Steamboat Springs

Steamboat Springs is home to nearly 3,500 businesses, almost 35% of which have employees on the payroll. A number of the city’s homegrown businesses have made it big, including SmartWool and Moots Cycles. The latter, a custom-bicycle manufacturer, started as a four-person operation and now employs about 25 full-time workers to make the bicycles it sells around the world.

4. Estes Park

Estes Park is a mountain town that does what mountain towns do best: attract and entertain outdoor enthusiasts. The city is a popular destination for tourists and one of the entry points for Rocky Mountain National Park, which saw over 3.4 million visitors in 2014, according to the National Park Service. Visitors to Estes Park spend $187 million annually at Estes Park’s 1,255 businesses.

5. Glenwood Springs

Glenwood Springs has held the title of “Most Fun Town in America,” bestowed annually by Rand McNally and USA Today. Each year, the city attracts over 1 million visitors, who come for rafting, fly-fishing, skiing, the hot springs and more and help make Glenwood Springs one of the best places in the state to start a business. About 2,400 businesses operate in Glenwood Springs and collectively earn over $1.46 billion annually.

6. Cañon City

Cañon City has one of the highest percentages of businesses with paid employees on this list. One reason for this: The city’s median annual income of $36,300 makes it affordable for businesses to add employees to the payroll. Although the town draws tourists for whitewater rafting on the Arkansas River and sightseeing at the Royal Gorge Bridge, the economy isn’t solely driven by tourism. Health care is a major employer in Cañon City, second only to federal and state correction centers, and the city’s business incubator space helps entrepreneurs get their ventures off the ground.

7. Durango

Durango is enjoying its slice of the boom that’s seeing technology businesses thrive in the state. Mercury, a payment-processing company, is one such success story. The Durango-based company grew to over 400 employees before selling for $1.65 billion in 2014. More than 3,800 businesses operate in Durango, drawing a total revenue of over $2.78 billion.

8. Golden

Business is booming in Golden. The city’s nearly 2,700 companies have an average revenue per business of $1,793,125, which is among the highest of the cities in this study. That figure gets a boost from MillerCoors — and the beer magnate’s Golden Brewery, also known as the Coors Brewery, is one of the “largest single-site breweries in the world,” according to the company. Enterprises such as Steelhead Composites and Outlast Technologies are headquartered in Golden, which is also home to the Colorado School of Mines.

9. Vail

Originally established as the base village for a ski resort, the mountain town still is powered by tourism. Although the community only has about 5,300 residents, Vail Resorts hosts millions of visitors each year, primarily for world-class skiing. Vail is home to annual events such as the Burton U.S. Open Snowboarding Championships and has hosted several Alpine World Ski Championships. The town is also making an effort to diversify its economy so businesses can thrive year-round.

10. Lone Tree

An educated workforce and low tax rates help make this southern Denver suburb a prime spot for businesses. Nearly 65% of residents have at least a bachelor’s degree, according to the city, and Lone Tree has a low municipal tax rate and no city property tax. The 2,000 businesses operating in Lone Tree have an average revenue per business of $1.5 million, which is among the highest of the cities we analyzed for this study.

Best places to start a business in Colorado

Rank

City

Population

Number of businesses

Average revenue per business

Businesses with paid employees

Businesses per 100 people

Unemployment rate

Score

1

Greenwood Village

14,223

4,731

$3,737,437

41.32%

33.26

2.8%

79.03

2

Aspen

6,657

3,090

$501,016

32.52%

46.42

4.8%

56.44

3

Steamboat Springs

12,032

3,459

$1,018,388

34.98%

28.75

4.1%

53.19

4

Estes Park

5,969

1,255

$396,916

38.88%

21.03

3.6%

51.61

5

Glenwood Springs

9,683

2,408

$610,170

35.84%

24.87

3.3%

51.32

6

Cañon City

16,433

1,186

$541,372

46.54%

7.22

3.5%

50.64

7

Durango

17,145

3,856

$723,278

37.06%

22.49

4.1%

50.32

8

Golden

19,034

2,695

$1,793,125

29.35%

14.16

4.8%

48.28

9

Vail

5,304

1,527

$720,430

33.14%

28.79

6%

47.24

10

Lone Tree

11,600

2,001

$1,526,269

26.69%

17.25

3.8%

47.17

11

Grand Junction

59,442

7,665

$963,121

39.35%

12.89

5.5%

47.17

12

Louisville

18,831

2,709

$1,313,970

28.20%

14.39

3.6%

46.62

13

Commerce City

47,239

3,018

$3,012,353

30.22%

6.39

6.8%

45.60

14

Gypsum

6,515

750

$598,303

41.73%

11.51

4.7%

45.45

15

Englewood

30,840

4,968

$1,418,362

35.06%

16.11

7.3%

44.70

16

Evergreen

9,041

1,594

$423,112

37.45%

17.63

5.8%

44.44

17

Avon

6,392

1,470

$682,046

26.73%

23

3.5%

43.73

18

Sterling

14,718

933

$918,096

47.70%

6.34

8.7%

43.62

19

Salida

5,304

1,217

$289,598

30.81%

22.94

5.1%

43.34

20

Sheridan

5,746

609

$1,170,466

47.95%

10.6

10.2%

43.29

21

Edwards

9,546

1,717

$440,296

28.19%

17.99

2.1%

43.08

22

Boulder

100,363

16,762

$990,983

28.95%

16.7

5.2%

42.85

23

Wheat Ridge

30,489

3,688

$741,822

34.57%

12.1

6.3%

41.22

24

Littleton

43,065

7,194

$1,031,352

26.34%

16.7

5.5%

41.09

25

Fort Morgan

11,381

1,049

$2,107,489

22.02%

9.22

5.3%

40.86

26

Fort Lupton

7,516

855

$995,075

26.20%

11.38

3.9%

40.32

27

Broomfield

57,171

6,284

$1,622,315

22.45%

10.99

4.7%

40.00

28

Trinidad

8,880

1,046

$433,597

32.79%

11.78

5.5%

39.88

29

Denver

619,297

67,500

$1,585,256

25.97%

10.9

6.2%

39.61

30

Cimarron Hills

15,909

1,427

$733,905

32.87%

8.97

5.1%

39.51

31

Alamosa

9,273

935

$692,021

37.97%

10.08

8.4%

38.99

32

Centennial

102,625

13,989

$969,084

24.20%

13.63

4.7%

38.82

33

Gunnison

5,890

1,076

$304,925

35.50%

18.27

8%

38.71

34

Greeley

94,194

7,116

$1,483,943

27.87%

7.55

6.7%

37.68

35

Black Forest

13,391

2,150

$142,454

28.19%

16.06

5%

37.33

36

Lakewood

144,530

14,817

$767,149

29.49%

10.25

6.2%

37.17

37

Lamar

7,874

749

$516,310

31.51%

9.51

6.5%

36.84

38

Montrose

19,036

2,921

$522,779

31.26%

15.34

7.7%

36.54

39

Woodmoor

8,880

895

$244,004

23.46%

10.08

3.2%

36.46

40

La Junta

7,106

663

$553,437

31.98%

9.33

6.6%

36.40

41

Windsor

19,263

2,533

$559,921

21.91%

13.15

3.8%

36.04

42

Rifle

9,370

1,341

$817,138

28.41%

14.31

7%

36.03

43

Fort Collins

146,822

14,921

$766,487

25.91%

10.16

5.7%

35.30

44

Loveland

68,712

7,525

$540,908

26.58%

10.95

5.9%

34.39

45

Superior

12,610

1,191

$449,690

20.07%

9.44

3.7%

34.03

46

Berthoud

5,168

1,042

$222,298

23.32%

20.16

6.3%

33.89

47

Colorado Springs

425,805

41,019

$945,155

24.50%

9.63

6.4%

33.86

48

Highlands Ranch

100,875

9,390

$720,261

18.24%

9.31

3.7%

33.70

49

Fountain

26,293

976

$1,176,163

22.95%

3.71

4.9%

33.50

50

Delta

8,843

1,224

$348,273

27.29%

13.84

7%

33.47

51

Manitou Springs

5,097

718

$128,171

20.06%

14.09

4.8%

32.93

52

Woodland Park

7,162

1,370

$229,220

28.76%

19.13

8.5%

32.84

53

Cherry Hills Village

6,126

871

$256,093

13.78%

14.22

2.7%

32.83

54

Cortez

8,496

1,259

$465,265

32.41%

14.82

9.9%

32.81

55

Pueblo

107,429

6,663

$968,151

27.42%

6.2

7.5%

32.65

56

Brighton

34,247

2,943

$820,732

23.58%

8.59

5.9%

32.41

57

Redlands

8,692

879

$196,942

17.06%

10.11

3%

32.38

58

Carbondale

6,468

1,432

$313,028

29.33%

22.14

9.5%

32.32

59

Frederick

9,110

1,022

$915,432

21.33%

11.22

6%

32.22

60

Castle Rock

49,990

4,619

$325,065

24.40%

9.24

5.3%

31.79

61

Parker

46,390

5,627

$329,410

20.79%

12.13

4.7%

31.77

62

Longmont

87,607

9,100

$568,955

22.46%

10.39

6%

31.68

63

Lafayette

25,238

3,057

$550,761

22.70%

12.11

6.7%

31.35

64

Columbine

24,995

3,254

$234,846

19.58%

13.02

4.9%

31.13

65

Arvada

108,300

11,415

$381,438

21.38%

10.54

5.4%

31.03

66

Ken Caryl

33,617

3,796

$398,696

20.84%

11.29

5.5%

30.96

67

Applewood

7,078

1,104

$364,137

14.04%

15.6

4.6%

30.94

68

Federal Heights

11,654

596

$601,607

24.83%

5.11

5.9%

30.77

69

Pueblo West

29,955

1,664

$369,128

22.78%

5.55

5%

30.48

70

Westminster

108,042

9,697

$715,416

21.64%

8.98

6.4%

30.37

71

Fruita

12,653

1,596

$210,602

15.73%

12.61

4.5%

28.79

72

Erie

18,672

2,015

$104,287

12.41%

10.79

3.1%

27.89

73

Welby

15,710

656

$641,494

30.03%

4.18

9%

27.59

74

Gunbarrel

9,325

1,575

$68,490

10.92%

16.89

4.7%

27.19

75

Aurora

332,820

23,839

$930,841

20.06%

7.16

7.6%

27.16

76

Milliken

5,699

590

$200,197

12.88%

10.35

3.5%

26.91

77

Berkley

11,721

756

$939,709

22.75%

6.45

8.9%

26.48

78

Northglenn

36,471

2,559

$372,059

23.64%

7.02

7.7%

26.30

79

The Pinery

10,642

1,211

$56,212

12.14%

11.38

3.8%

25.88

80

Orchard Mesa

6,623

770

$129,252

14.55%

11.63

5.3%

25.83

81

Thornton

121,814

8,273

$438,804

14.12%

6.79

5.8%

23.49

82

Firestone

10,517

918

$212,532

9.69%

8.73

4.4%

22.85

83

Clifton

20,944

1,361

$229,487

14.25%

6.5

8.4%

17.95

84

Security-Widefield

33,246

1,691

$177,986

9.23%

5.09

6.5%

17.08

85

Sherrelwood

19,048

1,263

$419,455

11.72%

6.63

8.8%

16.35

Methodology

NerdWallet analyzed 85 places in Colorado with populations of at least 5,000. Cities with fewer than 500 businesses were excluded, regardless of population. We calculated the overall score for each location using the following criteria:

Business climate, 65% of the overall score, is based on three metrics from the U.S. Census Bureau’s Survey of Business Owners.
Average revenue of businesses is 20% of the score. A higher average contributed to a higher score.
Percentage of businesses with paid employees is 25% of the score. A higher percentage contributed to a higher score.
Businesses per 100 people is 20% of the score. A higher number contributed to a higher score.

Local economic health, 35% of the overall score, is based on three metrics from the U.S. Census Bureau’s American Community Survey.
Median annual income is 10% of the score. A higher median income contributed to a higher score.
Median annual housing costs are 10% of the score. Lower median costs contributed to a higher score.
Unemployment rate for residents over 16 years old is 15% of the score. A lower rate contributed to a higher score.

Experts talk Colorado and business

Timothy Keane

Dean of the College of business and economics, Regis University

What makes Colorado a good place to start a business?

There are a variety of factors that make any region ripe for new business creation, such as climate, business-friendly public policies, diverse demographics and conducive infrastructure (e.g., access to education and training in top-ranked higher-education institutions, rapid- and light-rail transit, strong highway/road systems, etc.). According to the Ewing Marion Kauffman Foundation, Colorado ranked in the top five states for startup activity, and the Denver metro area ranked fifth across all metropolitan areas in the United States for new business creation. That’s up from last year when the area ranked eighth. At Regis University, we have recognized this important differentiator for our region by launching a new college of business and economics to support those new businesses in connecting with their communities for long-term growth.

What sectors or industries are doing well in Colorado and why?

Although growth is occurring across sectors, high-tech job creation has led the way in Colorado. Central Colorado, including Denver, Boulder, Colorado Springs and Fort Collins, are in the top 10 for all metro areas for high-tech startup density.

What could state authorities do to make it an even better place to start a business?

Public policy is a critical enabler of new business growth. Governments must have a long-term perspective in creating a competitive context for a region. For example, policies that support delivering knowledge through higher-education initiatives targeting all demographic segments create a diverse and inclusive workforce and lead to new business creation. As The Wall Street Journal reported, Latinos helped drive an increase in startups last year. This helps cities like Denver grow, where Hispanics represent a large segment of the population.

Mac Clouse

Professor of finance, University of Denver’s Daniels College of Business

What makes Colorado a good place to start a business?

Colorado is a good place to start a business because it’s a destination where people want to live. We have an available labor force that can meet a variety of business needs, with different education levels, different ages and different levels of experience. And most cities are eager to help in the establishment of new business.

What sectors or industries are doing well in Colorado and why?

Two sectors that are doing spectacularly well are technology and financial services. Both require the kind of human capital that we have. … The energy sector is also doing well because of our proximity to myriad natural resources.

What could state authorities do to make it an even better place to start a business?

Colorado government authorities should utilize tax reductions, tax rebates and other financial incentives to increase the likelihood of a successful startup. Money talks, and if the state talks and provides monetary incentives, businesses will come.

NerdWallet staff writer Kelsey Sheehy contributed to this article.

Update: A link in earlier versions of the methodology has been changed.

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